Tuesday, March 3, 2015

We all accept the fact that the U.S. Dollar is currency. But is gold a better alternative?

A recent Forbes column from Keith Weiner touches on what money really is contrary to what the popular belief might be, and how using gold as opposed to the dollar when assessing value would benefit everyone. Weiner, a long-time advocate of the gold standard, reminds readers that a large reason why the dollar is used as a medium of exchange as opposed to gold is because the government taxes the precious metal.

Weiner points out that the dollar is considered money because the government imposes it as such. Further, the government hinders the circulation of gold as a currency by treating it as a commodity (as opposed to currency), which thus subjects it to taxation.

Weiner strongly disagrees with such a view, insisting that gold is the actual money and that "the dollar may circulate, but it's not money. It's just a small slice of the government's debt. It's an I.O.U., a promise to pay, though most have long forgotten what the government once paid — gold."

He further argues that, ultimately, the "government can't change the laws of economics, such as transforming its paper into money." Weiner also believes that re-introducing gold into commerce would improve the free markets and, overall, have a positive impact on the economy.

Weiner concludes by noting that the dollar can't be an appropriate measure of value as its own value is on a constant decline, saying that a "falling unit of measure doesn't work." According to Weiner, there needs to exist a better way to gauge value than merely using whatever is currently the accepted medium of exchange, especially if said medium is an imposed one, stating that "gold is, by far, the best measure of value. Nothing else comes close, certainly not the dollar."